Money laundering at legal firms to be targeted

19 January, 2015

The Solicitors Regulation Authority (SRA) is warning firms to be on the lookout for money laundering activities, as the National Crime Agency (NCA) launches a crackdown on the crime.

In a new report the SRA had said some law firms are failing to put adequate systems and controls in place to detect and prevent money laundering, which could put them in the sights of the NCA.

The NCA have recently raised concerns over poor-quality suspicious activity reports (SARs), especially in the legal sector, where the issue is thought to be particularly bad.

They have announced that consent SARs that do not contain reasons for suspicion will be closed by the NCA upon receipt. It comes after a study showed a third of SARs submitted by solicitors seeking consent to continue working on a matter, did not contain sufficient information.

The NCA said in its warning statement to solicitors that failing to make a disclosure in the appropriate circumstances could itself be a criminal offence, and warned that any firm proceeding without their consent could commit a principal money laundering offence.

Solicitors have been told to be on the lookout for 42 ‘red flag indicators’ of potential money laundering and terrorist financing, which should lead to firms asking additional questions of their clients.

Some of the ‘red flag’ indicators to lookout for are, a secretive or evasive client, use of an intermediary, any kind of attempt to disguise the real client or attempts to avoid personal contact without good reason.

Ensuring your firm remains compliant with all aspects of finance is vitally important. Watson Buckle  can ensure you remain on top of the money coming in to and out of your firm to ensure you don’t fall victim to money launderers.

To find out more, please contact us.